The demise of the UN’s Palestinian agency could spell disaster for millions. Here’s why Israel wants it dismantled

By Nadeen Ebrahim, CNN

(CNN) — The suspension of funding by a growing number of Western countries for a United Nations agency for Palestinians has raised questions about the fate of the 5.9 million refugees it serves.

The United States and at least 13 of its allies have pulled funding for the United Nations Relief and Works Agency for Palestine Refugees (UNRWA), following allegations by Israel that some of its staff were involved in Hamas’ October 7 attack, which killed 1,200 and saw more than 250 others taken hostage.

Israel subsequently launched a war on the militant group that killed more than 26,000 people in Gaza, according to the Hamas-controlled health ministry there, and displaced the vast majority of the enclave’s 2.3 million inhabitants, who are in need of humanitarian aid.

While details remain scant, Israel alleges that 13 of UNRWA’s 13,000 Gaza staffers were associated with Hamas’ October 7 attack and took part in varying capacities, ranging from involvement in kidnapping hostages to being told to set up an operations room, according to a summary of the intelligence shared with CNN by an Israeli official. The summary does not provide evidence to support its claims.

UNRWA fired several employees after the allegations and launched an investigation, promising that anyone involved in the October 7 attacks will be held accountable “including through criminal prosecution” if found to be responsible.

But beyond the allegations of recent days, Israel has longstanding issues with UNRWA, accusing it of aiding Hamas and calling for it to be entirely dismantled.

Here’s what that could mean for the millions of Palestinians that rely on UNRWA for sustenance.

What does UNRWA do?

UNRWA was founded by the United Nations a year after the 1948 Arab-Israeli war, which marked the creation of Israel and the displacement of more than 700,000 Palestinians from their homes in an event known by Palestinians as the Nakba (catastrophe).

The agency provides a wide range of aid and services to Palestinian refugees and their descendants. It is a major source of employment for the refugees, who make up most of its more than 30,000 employees across the Middle East, and has representative offices in New York, Geneva and Brussels. Over 13,000 of its employees are stationed in the Gaza Strip.

UNRWA is unique in that it is the only UN agency dedicated to a specific group of refugees in specific areas. While its purpose is to support Palestinian refugees, UNRWA does not have a mandate to resettle them, a mandate that the UN High Commissioner for Refugees (UNHCR) does have. The UNHCR does not, however, have a mandate over Palestine refugees within UNRWA’s areas of operation.

Last year, the agency had a budget of $1.6 billion, most of which is earmarked for education and healthcare, followed by other services such as infrastructure and refugee camp improvement.

Since the Gaza war, UNRWA has issued a flash appeal for $481 million in additional funding for critical humanitarian needs.

What is likely to happen if UNRWA’s operations stop?

UNRWA is the primary humanitarian aid group in Gaza. Some 2 million Gazans rely on the agency for aid, with 1 million people using UNRWA shelters for food and healthcare amid the fighting in the enclave.

The agency has provided Gazans with everything from food and healthcare to education and psychological support for decades.

Along with the Palestinian Red Crescent, UNRWA handles almost all distribution of UN aid coming into the territory. The agency has 11 food distribution centers for 1 million people in Gaza.

The UN has warned that current funding is insufficient and that UNRWA may run out of funds by February.

Leo Cans, head of mission Palestine for Médecins Sans Frontières, also known as Doctors Without Borders, told CNN Sunday that the situation could deteriorate, as the aid coming in to Gaza is already insufficient.

“(If) you stop these trucks, people will die of hunger and very quickly,” he said.

The repercussions of UNRWA halting its operations could however be felt far beyond Gaza. Millions more Palestinian refugees live in neighboring countries like Jordan, Syria and Lebanon, and rely on aid from the agency.

For Palestinians on the ground in Gaza, prospects of life without UNRWA look grim. At one UNRWA school shelter in Deir al Balah, Gazans said they were worried about the suffering to come if UNRWA’s aid is suspended.

“UNRWA is the one who helps the refugees and the displaced,” Um Mohammad Al Khabbaz, a Palestinian woman at the shelter, told CNN on Monday. “What’s left for the people if they stop the aid?”

Alaa Khdeir, a university professor, called the move “an oppressive decision towards the Palestinian people.”

“This will mean more starvation, poverty, and deprivation, which ultimately means death,” added Khdeir. “This is not just an issue; this is a crime. It wipes out the people.”

UN Secretary-General António Guterres on Sunday appealed to the countries that suspended funding to UNRWA, urging them to reconsider their decisions.

“I strongly appeal to the governments that have suspended their contributions to, at least, guarantee the continuity of UNRWA’s operations,” he said. “The dire needs of the desperate populations they (UNRWA staff) serve must be met.”

It is unclear which organizations could replace UNRWA should the agency be forced to halt its operations. Yuval Shany, a professor at the Hebrew University of Jerusalem’s faculty of law, said that even if UNRWA is forced out of Gaza, Israel likely wants a phased-out exit to avoid a worsened humanitarian shock on the ground.

“The reason why Israel for all the years, despite its many criticisms (of UNRWA) didn’t push hard for dismantling UNRWA, and in fact even cooperated with UNRWA on many occasions, is because UNRWA does provide essential humanitarian services,” Shany told CNN, adding that with the current situation in Gaza, it may not be realistic to fully pull UNRWA out of the territory.

Why does Israel oppose UNRWA?

Israeli leaders have campaigned against UNRWA long before October 7, criticizing the organization’s role in Gaza and elsewhere as well as its definition of which Palestinians are eligible for refugee status. More recently, officials have sought to delegitimize the agency and have proposed dismantling it altogether.

In 2018, the US, under the administration of President Donald Trump, ended all funding for the agency at Israel’s behest, with the State Department at the time describing the body as “irredeemably flawed.” When Joe Biden became president in 2021, he reversed his predecessor’s decision and restored UNRWA’s funding.

The US has long been the biggest single donor to UNRWA.

In 2017, Israeli Prime Minister Benjamin Netanyahu sought to dissolve UNRWA and merge it with the main UN refugee agency, the UNHCR.

More recently, Israeli Foreign Minister Israel Katz has suggested that Israel will seek to stop the UN agency from operating in post-war Gaza, saying it “will not be a part of the day after.”

“We have been warning for years,” Katz said. “UNRWA perpetuates the refugee issue, obstructs peace, and serves as a civilian arm of Hamas in Gaza.”

UNRWA has repeatedly denied Israeli allegations that its aid is being diverted to Hamas, and that it teaches hatred in its schools, and has questioned “the motivation of those who make such claims, through large advocacy campaigns.” It has condemned the October 7 attack as “abhorrent.”

The threat to remove UNRWA from the besieged Gaza Strip has caused UN officials and those who rely on the agency to sound the alarm.

“Israel doesn’t see UNRWA as something which is conducive to resolving the Israeli-Palestinian conflict,” said Shany of the Hebrew University.

Israel instead views the agency as “a mechanism that perpetuates the Israeli-Palestinian conflict,” he told CNN, “And specifically perpetuates the conflict with regards to the right to return, by designating refugees and their descendants from 1948… as refugees.”

The right of return refers to the right of Palestinian refugees and their descendants to return to their ancestral homes in what is now Israel, which was recognized by the 1948 UN General Assembly Resolution 194. The fate of refugees is one of the most contentious issues in the Israeli-Palestinian conflict.

Israel also sees UNRWA as biased against it, Shany said, adding that it is “regarded by Israel as one of the more hostile UN agencies against it in international arenas.”

The agency defines Palestinian refugees as those who were dispossessed from their homes during Israel’s creation in 1948, as well as their descendants. That amounts to 5.9 million people today. Israel opposes their return, arguing that such a large influx of Palestinians would nullify its Jewish character.

UNRWA perpetuates “the narrative of the so-called right of return, whose goal is the elimination of Israel. For these reasons, UNRWA should be shut down,” Netanyahu said in 2018.

Of Gaza’s more than 2 million people, 1.6 million are refugees, according to UNRWA.

“According to Israel, this (UNRWA) perpetuates a narrative that the people who live in Gaza would someday go back to Israel, and this motivates them to resist,” Shany said.

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Abeer Salman in Jerusalem and Mohammad Sawalhi in Gaza contributed to this report.